Good morning ladies and gentlemen today is Tuesday July, 30, 2013, and welcome to the Butler National Corporation’s Fourth Quarter and Fiscal Year-End Results Conference call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] Your call leaders for today’s call are Jim Drewitz, Creative Options Communication, Clark Stewart, President and CEO, and Craig Stewart, President of Aerospace Group. I would now hand the call over to Mr. Jim Drewitz. Mr. Drewitz, you may begin.

Thank you and good morning, everyone. Before Mr. Stewart begins, I would like to draw attention to the fact that except for historical information contained herein, the statements in this conference call are forward-looking and made pursuant to the Safe Harbor provision as outlined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause Butler National’s actual results and future periods to differ materially from forecasted results. Those risks include among other things the loss of market share through competition or otherwise, the introduction of competing technologies by other companies, new governmental safety, health, and environmental regulations, which could require Butler to make significant capital expenditures. The forward-looking statements included in this conference call are only made as of the date of this call, and Butler National undertakes no obligation to publically update such forward-looking statements to reflect subsequent events or circumstances. Important factors that could cause actual results to differ materially from expectations reflected in the forward-looking statements include, but are not limited to factors described under the risk caption in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. With that completed, I would like to turn the call over to Mr. Clark Stewart. Mr. Stewart. Clark D. Stewart: Thank you, Mr. Drewitz, and good morning, ladies and gentlemen. We appreciate you dialing in this morning for this telephone call. We experienced a challenging year in Butler and we think that we are looking forward to an exciting fiscal 2014. We experienced a downturn in our Aerospace products revenue as you know, 21%. We reacted to that in some ways, in others we didn’t, but the bottom-line is the market is very sensitive to the economics of the world and the welfare of certain manufacturers of our airplanes. And as a result, we had but we thought were orders, but and they are turning out to be orders the only thing is they’re slightly behind schedule from the standpoint of international funding and so on. So that’s pretty much all I’m going to say about the real downturn. We reacted by retaining our good people and our skilled mechanics, and I think that long-term will be a good solution. So we are excited about the development of our new supplemental type certificates and the growth in the international markets. I think those are significant advances for the company and as we go along I’ll tell you a little bit more about that. We did spend $1.8 million this last year in project development and when we talk about project development, we are talking about new STCs to support the classic aviation airplanes with assistance from the original equipment manufacturers. We’re also talking about new STCs for special missions with the objective to diversify the special mission platform as market evolves, including new concepts and performance enhancements. And we are actively working on those at this time and we spent a lot of money on it and we’re probably going to spend in myriad of another $2 million to $2.5 million before that’s completed. We think that really is the long-term future of the modifications as far as we are concerned. And we think that’s very exciting work. We are also working on new Avionics products to integrate the new Avionics into the Classic airplanes. We have lots and lots, thousands of airplanes out there, who need the Avionics upgraded to the modern-day government equipment and we’re in the process of doing that. We have defined our modification business a little bit different to include systems integration. We found out through our market surveys that people think we’re just modifiers and really we’re electronics and avionics integrators, as well as modifiers. We don’t actually sell the classified equipment, which is the actual cameras and monitoring devices, but we do, do all the integration to hook all that stuff up and make it work. We also refocused our emphasis on our maintenance business, related to this integration and to the support of Classic aviation products. The support of the Classic aviation, like I say, is somewhat initiated by the manufacturers. They want us to support a lot of the component parts that are becoming obsolete due to electrical technology advancements. We’re working on the noise suppression for the Learjet 20 Series to make it a stage 3 compliant airplane. I believe we have talked about the in the past, this is a basis though for our basis, this is the basis for our future assistance with stage 4, which is coming. The new airplane is being manufactured today basically have to be stage 4. And so we’re working on a - we’re getting the base knowledge that will take for us to do the same kind of thing for the airplanes that are out there now. So those are the things that we’re working on, as far as what when we say new product development and acquisition. We are also looking at certain manufacturers of some of those components as the opportunities arise. So that’s the key on the product development, that’s third paragraph in my comments in the press release. The next paragraph deals with the discussions are having with our business partner on the 20% equity interest Boot Hill, which is BHCMC LLC is the operative subsidiary, we own 80%, we’re looking at acquiring the other 20%, and as we have had many questions in the past on Page 8 of the 10-K, it describes the interest of our business partner as 20% equity, 40% of the profit and loss and 3% of 7% of the Board of Managers. That’s also if you print it out on EDGAR there will be Page 7 of the printed copy. So that tells you a little bit more about the paragraph, we’re not going to say a whole lot more about that till we are in a position where we have an official formal agreement with our business partners and we also have the financing arranged. At that point we will tell you that we’ve made some progress, other than that the only thing we can say is, we’ve been having discussions, friendly discussions now that there’s not a rush, there is not any crisis in this situation, we just want everybody to know that we’re working on it. This has been an exciting year, and it’s an exciting time from the product development standpoint and the possibilities of our discussions with our business partners. As we go into the details of the business segments, first paragraph on professional services, we have an additional electronic games and additional table games that I’ve mentioned in last paragraph, is essentially the expansion of phase 2 required by the contract with the state of Kansas and we’ve completed all of that. We’ve increased in number of machines from 580 to 800 and then finished out 15,000 square feet of gaming area, finished the connection between the events center next door and the casino and all of this adds up to including the machines of about $15 million, $14 million to $15 million, something like that like that million dollar investment of which we’ve paid off about half of at this point, and the remainder will be paid off within the last next 4 years or less. The amortization of these add to the cost described in that paragraph under professional services and that is a part of the reason that our costs are growing a little, about $800,000, in that segment. Most of these additions are amortized over 3 years up to the 11 years that remains within our contract period. We are not trying to carry anything out past the end of the contract because there’s no certainty that that contract will be renewed at that time, we hope that it is, but there’s no guarantee. So now we get to the Aerospace products, as we talked, we are refocusing a little bit. Our big item with the Aerospace is the flow of the orders and up at the top of the Page 2 of the press release. Page 3, the paragraph talks about, state-of-the-art avionics, sometimes we need to define that a little bit for you. That would included the Garmin GTN 750 series, which is their navigation radio, GPS, very nice equipment to assist and replace all of the old avionics in a lot of these airplanes. We’ve also acquired and are officially account [ph] dealer as well as, Garmin and Honeywell, KING and we are in the process of becoming universal dealer. We believed that this dealership in this expansion over avionics scope is critical to the integration that we talked about earlier on special missions, and the use of something other than brand new airplanes in this industry. So as we move on down through the operating cost, clearly we maintained our staffing as best we could in the deep rest period of sales and we see those sales coming back and that we do have airplanes in Newton now. Some of them are there before we get the orders or the orders funded, I guess, I should say we kind of don’t like to count them until they are funded. But they are there and once we get them to Newton, we have never had experience of losing them. So we move on into cost related to professional services and the key here is the definition of cost, I realized when I read this again, that those are direct type cost related to a product or at STC. The expenses below are those costs that are more applicable to all STCs and all operations of the business. So when we talk about cost changing, that’s what we are saying, when we talk about expenses, we are in the more general category. So you can see in the above paragraph where we are talking about 84% of the segment revenues and 60% [ph] versus 67% we are talking about those directly associated. When we are talking about the 18% versus 27%, we are talking about maintaining the general overall expenses at the relatively level amount while revenue went down. As we move on to our backlog, we are really excited that the backlog is going up and it’s up about 21% since the end of April when it was $3.3 million. The backlog as you know we’ve always been fairly cautious about this being something that’s somewhat uncertain, but we are, like as I told you a minute ago, on airplanes being there sitting on the ground makes big difference. The key point about these orders and schedules in the backlog are the mod services and contracts take a month or maybe a year to complete, which is what we say reality means - really mean that orders take years to commence and years to complete. Process of approval of a concept is yes by the customer and funding by the customers are a variable item and could take many years. And that’s basically you need to understand there about the product, they will sign up, but the airplane may not show up in the order and the cash may not show up, as we would like to have it. We have been working on cost reduction and the cost reduction really is the some payroll rate reduction, which we talked about, we have had attrition of employees. If you look on Page 10 in the annual report you will see that we’ve gone from a 110 to 99 to 87 and the basic business and the casino has gone from 278 to 273 and if you look back a couple of years before, we were up in the low 300s. So we’ve made significant reduction in staffing and we’ve got cost control of most items except, of course, as you know our insurance cost is going up as it is for most people in the healthcare and workers comp area, and in an attempt to control that, we did report the sale of Butler National Services Inc. in Florida as a cost reduction factor, because it was affecting all of our insurance cost across the corporate structure. So we had to do something with that. And I believe Jim, that I’m really, I’m excited about this. I think we have a chance to really make Butler and Avcon and all our avionics group and airplane aerospace product group, I should say a much more viable and much more responsive industry than we’ve had associated with the products we’ve been selling. So I think it’s a great thing. Craig, do you have any comments, you want to add?

No, I think you covered it, I think the big thing is the diversification of product lines is probably the most significant item in terms of stability going forward, how to work. We have an airplane manufacture, have financial difficulty that we are not heavily tied to one manufacturer in terms of the products that we are supporting. Clark D. Stewart: Thank you, Craig. That was Craig Stewart.

Clark, are you ready go to questions? Clark D. Stewart: Yes, I’m ready for questions, Jim, go ahead.

All right Erica, let’s go ahead and proceed with questions in.

Ladies and gentlemen, at this time we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from Timothy McMillan.

A couple of things revenue at the casino right now for the summer session, how is that been going? Clark D. Stewart: Thank you, Tim, I appreciate the question. The revenue seems to be holding in their according to budget, which you probably don’t know the budget, but the budget is basically a reduced budget from what it was last year, because we’ve been working hard to reinstate our busing program in the junket activity. We have schedule this weekend in cooperation with the Dodge City, PCRA Rodeos or PRCA, I guess it is Rodeo, a junket coming in actually by air this time and this will be the first one of the process of junkets and testing the new procedures and make sure we have it all figured out, because we had to rework the approach to satisfy state Kansas and that also allows us to use buses and significantly increase our tourism. The key point is, last year about this time is when we stop the busing complete other than just volunteer buses that might come in from a nursing home or local group of people getting ready to go have some fun and those people, of course, had no association with the casino at all, they just showed up, and we would have a couple of those a month and 100 people may be total. So that’s a significant difference, I don’t think that, it's not really effecting the overall revenue, we are basically the same revenue for the 3 months, we expect to be same as it was last year, real close or maybe even better actually. If share in the manager Resonia [ph], she would tell me it's going to be better and it probably will, she knows better than I do. That’s status of the casino revenue; I think it's hanging in their real well actually.

From this noise suppression STC, is this one of the bigger items you think going forward that’s going to do well or how would you… Clark D. Stewart: I think it’s going to do very well, but on the other hand, this is a very small piece of the new items going forward. The current one that will have the STC around some time this fall, I believe, the economic effect of that is probably not going to be that great, we will make money on it, but it’s not going to be - it’s not going to add 50% to revenue or anything like that. What it does is gives us a basic knowledge of how to address Stage 4 and get an understanding of all of the requirements here, plus it certainly will pay for itself and makes some money. But it’s really more of an education and a transition plan here than anything else. The ones we are excited about of course are the special missions where we are really changing concept, changing approach that really we haven’t seen in the industry as of yet. We know that it works we’ve done some of this, but it’s not been widely exposed, let's say that. Did I answer, Tim?

Yes, the new fiscal year that needs special mission projects, you think if you go out over this fiscal year, it’s going to have some pretty good revenue and profit increases into Butler, is that what you’re saying? Clark D. Stewart: I don’t know whether it will be that great, I think the only thing that will increase our revenue this year is getting back in the business, getting it moving, getting the flow of airplanes coming through, which is what we are working on. I think obviously we are looking at significant revenues from the special mission stuff we are working on, we really can’t talk about what we’re doing, but I’m excited about it, I can’t wait to get going and we have got engineering people lined up, we have committed to $1.5 million worth of R&D outside the engineering that’s in process well underway. So it’s an exciting time for us.

One last question, our next phone conference will be around the middle of September, would you hope to have any significant announcements by then on anything? Clark D. Stewart: I couldn't tell you, I do not know. I think that announcements that quick, we will probably update you on the status of everything, but as far as having anything complete by then, I doubt it. It is probably more in the 6 months timeframe on most of the stuff before we have significant real results especially the engineering side of stuff.

That’s mainly you’re talking about the aviation modification end of things. Clark D. Stewart: I’m talking about all of it, all things we’ve mentioned is probably at least 6 months away before it gets to be a final item.

Our next question comes from John Dickson.

How did the architectural segment of professional services do in 2013?

Actually making money. Clark D. Stewart: Good money. It's making money. Let me look at it, I have to check it. Yes, I do have it. Just a minute John, I will get over there. According to this, after corporate allocations and all of the charges we could give them, they made about $15,000, but they did about $1 million worth of revenue and in a process about half of that and so we ended up with about 15, 20, which is good, they made a profit. We’re looking at significant use of their talents in Dodge City as we try to develop the land that we own south of casino, we haven’t made any official statements on any of that, but we’re working on that and we’re starting to have activity there. And that’s all development like hotels and retail and entertainment, so it has nothing to do with the casino or anything else, but we’re just designing and hopefully leasing, selling land all that kind of stuff.

Good. Are you giving any thought to trying to get Rockwell Collins as a supplier? Clark D. Stewart: We haven’t. That is Collins’ leadership we have, that is Rockwell Collins.

Yes. You are a dealer for Rockwell Collins? Clark D. Stewart: Sure. That’s happened in last 6 months, right. Yes. And we’re also working on Universal. Universal is a company that makes the flat panel displays for the airplanes and so called UNS ones that are out there, been out there for 30 years are being replaced and we want to get into that business.

Are you making any headway or trying to get into the drone business as far as the Avionics and Control Systems are concerned? Clark D. Stewart: Probably not at this point, we’re in that drone business through our customers in California, who actually, we do the modifications for the test airplanes, for the drones, for the cameras, and flares and all that kind of stuff and that is active.

Is the old cockpit Avionics Control Systems still in business? Clark D. Stewart: Yes. Yes, it is. It’s just being upgraded by the, like the Garmin 750, the GTN 750, had to replace all your common UNAV radios and your area-navs and all that kind of stuff in one box, one flat screen display as you know.

There is going to be a lot of control, does it?

Our next question comes from William Myers.

I would like to ask a couple of questions as it relates to development of the properties. Is there any mineral rights considerations, obviously you have mineral rights, but is there any consideration for drilling on those properties, and secondly as it relates to enhancing shareholder value, is the company considering any shareholder or share buyback of shares in order to support the price a little bit? Clark D. Stewart: First of all, let’s talk about the mineral rights. We have water rights and we have mineral rights on the property in Dodge City. The water rights are the most valuable of the rights, I believe, and as far as water wells and so on, we aren’t doing anything with that because the part that has water rights is still in the county and is still agriculture land. So we’re not moving forward with that. As far as drilling in that area, we don’t really see much activity right in that part of Dodge City or that part of Ford County actually. Most of it is up to the Southeast probably 60, 70 miles. So that’s where it is. We would love to have a gas well there on our 400 acres, but we haven’t had any prospect. No one has come around wanting to lease it for that purpose at this point. But we would certainly be receptive. Regarding the buyback, as you probably figured out the discussion with our members on the casino operation has got to be the first step of any kind of activity until we get past all that, we don’t want to initiate any kind of stock program that would change the -- significantly change the way we were dealing with our current stock. So we haven’t considered it, that was the best way to say it, we just haven’t done anything with it right now. But I think that as all this unfolds you will figure that -- you’ll understand that we probably don’t need to at this point. That all I can tell you about it is, is we really haven’t seriously considered it about a year since, I think Tim asked the question of last time. We have looked at it then, but we haven’t done anything since.

At this time, I have no further questions.

Well, Clark, great call, close it all off and invite [ph] back. Clark D. Stewart: Thank you very much, ladies and gentlemen for joining us this morning; it’s taken about a half hour. I appreciate you taking time out of your busy schedules. And we thank you for your questions, we appreciate it as always. Thank you very much. Have a good day.

That concludes today’s conference call. Thank you for attending.